By week’s end, the news had been strongly overshadowed by the announcement that Secretary of Health and Human Services Kathleen Sebelius was resigning, and that President Barack Obama was nominating current Office of Management and Budget Director Sylvia Mathews Burwell to take her place; but the massive release of Medicare data on physician payment on Wednesday, April 9 was astonishing nonetheless, and ultimately perhaps even more significant.
As the article analyzing and commenting on the data release in The New York Times noted, “A tiny fraction of the 880,000 doctors and other health care providers who take Medicare accounted for nearly a quarter of the roughly $77 billion paid out to them under the federal program, receiving millions of dollars each in some cases in a single year, according to the most detailed data ever released in Medicare’s nearly 50-year history.”
What’s more, as Times reporters Reed Abelson and Sarah Cohen noted in their April 9 story, “In 2012, 100 doctors received a total of $610 million, ranging from a Florida ophthalmologist who was paid $21 million by Medicare to dozens of doctors, eye and cancer specialists chief among them, who received more than $4 million each that year. While more money by far is spent for routine office visits than any other single expenditure, one of the most heavily reimbursed procedures — costing a total of $1 billion for 143,000 patients — is for a single treatment for an eye disorder common in the elderly.”
Predictably, of course, leaders of the American Medical Association (AMA) immediately worked to diminish the significance of some of the revelations coming out of the data. “We know there are going to be limitations,” Ardis Dee Hoven, M.D., told the Times. “It’s raw claims data. This gives us no window into quality or anything of that nature.” While patients may know who performs a high number of procedures, like hip replacements, for example, they will not be able to tell anything about whether the patients needed the surgery or whether they benefited from the surgery,” she cautioned, adding that physicians were not able to review the data, and that some of it might be factually incorrect.
Still, the Times reporters also quoted Bob Kocher, M.D., a former Obama administration staffer and now a partner in the venture capital firm Venrock Health Partners, as saying that “This is actually the most useful data set that Medicare has ever released. People will be able to see just how many elbow surgeries a given orthopedic surgeon has performed on Medicare patients,” he told The Times, and will be able to see whether, for example, a CT scan is performed on every patient or only rarely. “You’re going to see variation,” he predicted.
And some of the data, based on a Times analysis, is quite shocking, actually. As the Times reporters note, “In 2012, 100 doctors received a total of $610 million, ranging from a Florida ophthalmologist who was paid $21 million by Medicare to dozens of doctors, eye and cancer specialists chief among them, who received more than $4 million each that year. While more money by far is spent for routine office visits than any other single expenditure, one of the most heavily reimbursed procedures — costing a total of $1 billion for 143,000 patients — is for a single treatment for an eye disorder common in the elderly.”
What seems clear here are a number of things. First, this data release is potentially more momentous than the release of hospital charges last year, for a number of reasons, most especially because of the apparently incredibly wide range of variation of Medicare charges on the part of practicing physicians (which makes sense for obvious reasons), compared to the already-wide variation of charges on the part of hospitals participating in the Medicare program.
And the push towards transparency is very purposeful on the part of Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS). As HHS Secretary Sebelius said in a statement on April 9 within a press release announcing the data release, “Currently, consumers have limited information about how physicians and other healthcare professionals practice medicine,” said Sebelius in a statement. “This data will help fill that gap by offering insight into the Medicare portion of a physician’s practice. The data released today afford researchers, policymakers and the public a new window into healthcare spending and physician practice patterns.”
So, first, this is part of a broader push for transparency around healthcare costs and payments that will only accelerate in the coming months and years.
Second, this data release will likely increase the tension between organized medicine (the AMA and the medical specialty societies) over transparency of healthcare payments and outcomes, as this whole phenomenon moves forward over time.
Third, even though this situation with Medicare stands separate from everything else taking place right now in the industry, it has the potential to impact the ways in which physicians will be interacting with healthcare and healthcare IT leaders along a number of dimensions, including participating in outcomes measurement and value-based payment programs, accountable care organizations, bundled-payment contracts, patient-centered medical homes—the list goes on.